A decision by China's two major refiners tosuspend sales to independent service stations has had a major impact on the supply of oil products in some regions, according to a report by the Shanghai-based Oriental Morning Post. After the state economicplanning agency, the National Development and Reform Commission, declined a request from Sinopec and the China National Petroleum Corporation (CNPC) to raise wholesale and retail prices in line with the rise in international crude oil costs, the two companies announced the suspension of deliveries to independent gas stations, giving priority to their own retail franchises during the peak summerperiod. Despite assurances by the two oil majors that this would nothave any significant impact on supply, severe shortages have alreadybegun to emerge in cities in southern China's Guangdong province, according to local reports. An investigation conducted by the pricingbureau in the southeastern island province of Hainan earlier this week also revealed that many of the 200 independent retailers were facing closure as a result of supply shortages. Independent oil retailers have been forced to turn to regional refiners, concentratedin the northern provinces of Shaanxi and Shandong and unaffiliated with the two oil majors, the Oriental Morning Post said. The report said that the ex-factory price of gasoline produced at one major regional refiner, Jincheng Petrochemical in Shandong Province, rose by 60 yuan a ton yesterday to 5,860 yuan. Independent oil retailers have been struggling to maintain operations in the face of strong competition from China's big state-owned firms, with CNOOC and Sinochem - China's third and fourth biggest oil companies - also entering the retail business in conjunction with multinationals.|

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